J.P. Morgan Asset Management raises long-term return forecasts, citing AI growth

J.P. Morgan Asset Management released its 2027 Long-Term Capital Market Assumptions, providing a 10-to-15-year outlook across various asset classes. The firm forecasts a 7.0% annual return for a traditional U.S. dollar 60/40 stock-bond portfolio. The report identifies artificial intelligence as a key driver of long-term productivity and corporate profitability. John Bilton, Global Head of Strategic Research, noted that markets are being reshaped by technological innovation and shifting capital flows.

The assumptions suggest that investors may need to look beyond classic stock-bond allocations to achieve greater diversification due to elevated correlations. The report projects that a portfolio including 30% in diversified alternatives could increase expected annual returns to 7.5% and improve risk-adjusted returns by 21% compared to a simple 60/40 mix. Global aggregate bond forecasts are set at 5.3%, the highest in two decades.